Correlation Between Xinjiang Goldwind and Rotork Plc
Can any of the company-specific risk be diversified away by investing in both Xinjiang Goldwind and Rotork Plc at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xinjiang Goldwind and Rotork Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinjiang Goldwind Science and Rotork plc, you can compare the effects of market volatilities on Xinjiang Goldwind and Rotork Plc and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Xinjiang Goldwind with a short position of Rotork Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Goldwind and Rotork Plc.
Diversification Opportunities for Xinjiang Goldwind and Rotork Plc
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xinjiang and Rotork is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Goldwind Science and Rotork plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rotork plc and Xinjiang Goldwind is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Xinjiang Goldwind Science are associated (or correlated) with Rotork Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rotork plc has no effect on the direction of Xinjiang Goldwind i.e., Xinjiang Goldwind and Rotork Plc go up and down completely randomly.
Pair Corralation between Xinjiang Goldwind and Rotork Plc
Assuming the 90 days horizon Xinjiang Goldwind Science is expected to generate 1.36 times more return on investment than Rotork Plc. However, Xinjiang Goldwind is 1.36 times more volatile than Rotork plc. It trades about 0.03 of its potential returns per unit of risk. Rotork plc is currently generating about 0.01 per unit of risk. If you would invest 75.00 in Xinjiang Goldwind Science on September 4, 2024 and sell it today you would earn a total of 5.00 from holding Xinjiang Goldwind Science or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.19% |
| Values | Daily Returns |
Xinjiang Goldwind Science vs. Rotork plc
Performance |
| Timeline |
| Xinjiang Goldwind Science |
| Rotork plc |
Xinjiang Goldwind and Rotork Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Goldwind and Rotork Plc
The main advantage of trading using opposite Xinjiang Goldwind and Rotork Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Goldwind position performs unexpectedly, Rotork Plc can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Rotork Plc will offset losses from the drop in Rotork Plc's long position.| Xinjiang Goldwind vs. Shanghai Electric Group | Xinjiang Goldwind vs. American Superconductor | Xinjiang Goldwind vs. Cummins |
| Rotork Plc vs. Dear Cashmere Holding | Rotork Plc vs. Goff Corp | Rotork Plc vs. Wialan Technologies | Rotork Plc vs. Cgrowth Capital |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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